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Canada Passes Trade Agreement with Colombia

Some good news for Colombia on the trade front: Canada’s House of Commons passed the pending free trade agreement with Colombia on June 14, by a better than 2-1 margin. The Senate will now vote on the accord for final approval. Nonetheless, this is an important step for both countries, and a signal of support—both from Prime Minister Harper’s governing Conservatives and the opposition Liberals—for the priority effort to build Canada’s ties with the hemisphere.

Two-way trade between the countries is already over $1.25 billion each year; expect that to expand, especially in agricultural products, now that Canada has a privileged position in Colombia’s economy vis-à-vis other trade partners, including the United States. Expect the United States to continue to lose market share in Colombia, a market we have traditionally dominated, even as the White House calls for a doubling of U.S. exports over a five-year period.

Many observers have complained that there is no trade agenda in the hemisphere. In fact, that’s incorrect. There is a huge trade agenda in the hemisphere. It’s just that, for the first time in history, the United States is sitting on the sidelines. Not only are we not leading the effort, we’re not even playing. It’s difficult to win at anything, in fact, if you’re not in the game, which is where we are right now with U.S. trade policy in the Americas.

Other observers routinely say that U.S. policy built on “trade not aid” has run its course, because in fact trade is insufficient for development. We should therefore not be overly concerned that pending trade agreements with the region are stalled. Arguing that, however, devalues the critical role that open markets play in economic growth and development, and in any event, nobody ever suggested that trade was sufficient in and of itself. Trade is insufficient but necessary—those who remain unconvinced should ask the North Koreans how autarky is working out for them.

The bottom line is this: until we find a way to move ahead with pending trade agreements with Colombia and Panama, as well as to build out a broader hemispheric trade agenda through vehicles such as the Trans-Pacific Partnership, we will continue to fall behind others including Canada, China and Europe in the hemisphere. When we do eventually find a path forward, we may well be faced with markets that are already locked up by others, playing by rules of the game that someone else determined. The longer we wait, the more difficult it will become.

*Eric Farnsworthis a contributing blogger to americasquarterly.org. He is Vice President of the Council of the Americas in WashingtonDC.

Any opinions expressed in this piece do not necessarily reflect those of Americas Quarterly or its publishers.